- Nancy Kacungira
- BusinessAfrica
Photo credit, NYSE
Jumia became the first African technology company to be listed on the New York Stock Exchange in April 2019
Juma’s historic IPO could not have started better. The day Jumia became the first African technology company to list on the New York Stock Exchange, the pomp was huge.
International media noticed this and investors rushed in, the stock price rose more than 70% that day, but the pomp was short-lived.
“There are 700 million people in the countries where we operate, and last year we served more than four million consumers,” Sacha Poignonnec, co-executive director, told the BBC on the stock exchange.
For reading especially on BBC Africa:
When I sat down to talk to its co-CEO, Jeremy Hodar, in September, the company had several difficult years. Stock prices plummeted and then recovered, lenders withdrew, and the company ceased to be listed in three of the fourteen countries in which it operated, not to mention fraud lawsuits in courts in New York and the United States. his identity.
But the promise of millions of consumers who have just connected to the Internet has not disappeared, as well as interest in Jumia, which is still the largest e-commerce company focused on the African continent, although its management and much of its technical expertise is outside Africa.
Photo credit, Jumia
The promise of delivery for more than a billion consumers in Africa has sparked interest in Yumia
By 2030, consumer spending in Africa is expected to reach $ 2.5 trillion. Jumia still sells products in 11 countries. He manages a market in which thousands of other companies sell products on his platform and has a financial arm, Jumia pay, which allows customers to buy, pay bills and order pizza without leaving the Jumia platform.
The abandonment of unprofitable markets and the new interest in e-commerce caused by the pandemic enabled Yumia shares to recover to the levels reached on the day of the IPO.
“Overall, e-commerce on land is still very underdeveloped compared to traditional retail,” says Hodara, when asked why Jumi’s trip turned out to be so inconvenient. “It’s a long road and the opportunity is huge. So let’s go step by step.”
While the platform was first celebrated as a place to buy electronics, consumers usually shop only a few times a year, so the company is now trying to attract consumers to buy everyday things like groceries and clothes. ….
“These products make more profit than electronic products purchased earlier,” says Hodara.
Photo credit, Jumia
Jumia co-CEO Jeremy Hodara says he does not provide a time frame for the company’s profitability
“We make almost a dollar of profit when we deliver the order after all the logistics costs. What we want to do now is invest more in growth in two areas: technology and marketing. The direction we are going now that we feel comfortable and confident business. ”
Plans to continue aggressive spending on advertising and technology mean Jumie’s high operating costs could worry investors. So when will the company finally show a profit?
“We are not announcing the schedule, but we are trying to show regular results,” he said. Hodara.
Meeting the diverse needs of the continent’s fragmented markets is a major challenge for any pan-African business. As the opportunity in Africa presents itself as if it stretches across the continent, I ask Mr. Hodar if the reality is more nuanced.
“Consumer service in Egypt is not the same as customer service in Nigeria, and working with sellers in Morocco has nothing to do with working with sellers in Kenya,” he said.
“The way you need to work is very local, navigating the specifics of those countries, while maintaining economies of scale through technological processes.”
Photo credit, Getty Images
As the use of the Internet increases, so do the opportunities for e-commerce in Africa
With two French founders and CEOs located outside the continent, Jumia’s credential as an “African” company has been called into question. Mr Hodara says Jumia has decided not to engage in this controversy because it is neither “fair nor relevant”. “But isn’t that relevant for mainland consumers,” I ask.
“Our consumers are Africans, our sellers are Africans, our employees are Africans, we are creating hundreds of thousands of jobs on the continent,” he replies. “We are opening a technology center in Cairo, Egypt, we will have a hundred developers there and we will do more. Our mission is Africa.”
In addition to Yumia, there are three other “unicorns” – private technology companies worth over a billion dollars – in Africa, compared to 100 in China and 200 in the United States.
Despite that, the possibilities on the continent are huge. Young and growing populations, growing internet penetration and investments in digital infrastructure represent even greater opportunities, provided a favorable environment is created.
Google recently announced plans to invest $ 1 billion in Internet connectivity and start-ups in Africa, adding billions that have already been spent on infrastructure projects to enable more people to access online.
According to Mr. Hodari, the desire to respond early to the challenges of e-commerce in Africa is what allows Jumia to continue to play a leading role in this area. “The complexity of operations on the continent means we have unique barriers to entry that make it difficult for anyone to do what we do,” he said.
While other e-shops have appeared on the continent, Jumia still has the largest number of customers, with 10 million more monthly visits than its closest competitor, South African Takealot.com.
The rise of e-commerce in Africa seems inevitable, but startups like Jumie will have to be adopted by consumers fast enough to contribute to their own success rather than the success of their successors.
Buying from home is tempting, especially in these times of pandemics.